Asked by
lindsey malone
on Dec 11, 2024Verified
Economies of scale imply that within some range a firm can increase the size of operation and
A) total cost will decrease.
B) fixed cost will decrease.
C) average total cost will decrease.
D) average total cost will increase.
E) average variable cost will decrease.
Economies of Scale
The cost advantage that arises with increased output of a product, leading to a reduction in the per-unit cost of production.
Average Total Cost
The total cost of production (fixed and variable costs combined) divided by the number of units produced, indicating the cost per unit of output.
Operation Size
The scale or scope of a business's activities, ranging from small, single-location operations to large, multinational corporations.
- Explain the impact of economies and diseconomies of scale on firm's cost structures.
Verified Answer
JF
Learning Objectives
- Explain the impact of economies and diseconomies of scale on firm's cost structures.